Honda CEO Ito believes Chinese market not ripe for hybrid cars yet

From Japan Daily PressApril 24, 2013

Japan Daily Press - This year's Shanghai auto show display spaces were filled with numerous models of hybrid and electric cars – which maybe is a sign that the global auto market is moving in that general direction. It may also be a loud signal to China to consider greener automobile solutions, what with the massive clouds of smog that covered the cities these past few months. But Honda Motor Co. CEO Takanobu Ito believes that the Chinese market might not be quite into hybrid cars yet.

Of the four new concept and production cars displayed by the Japanese carmaker at the Shanghai auto show on Saturday, none were hybrids or electric. Honda put out three hybrid vehicles available to the Chinese market last year – the CR-Z, Insight and Fit Hybrid – but the automaker revealed that it only sold 542 hybrid units in China in the whole of 2012. "Overall, we have high hopes for hybrid technology. In terms of how important it is to the Chinese market we are slowly releasing products and looking at how they do," Mr. Ito said in Shanghai on Saturday. "But we think there are still more Chinese consumers who want to simply buy a car that fits their needs rather than buy a hybrid. By needs I mean a good-quality car with an affordable price that doesn’t break down. At present, we think these take higher priority." The current atmosphere regarding hybrids could eventually change, Ito allowed. He said that the hybrid mentality needs a push from the Chinese government, by incorporating higher fuel-economy standards and the government’s overall backing for a green-car industry. Honda is even making plans to produce hybrid components and parts in the country in 2014.

Ito admitted that hybrid car technology would cost a bit more no matter what, and at this point this is something that Chinese consumers are not yet willing to pay. If, like in Japan, the Chinese government gives incentives and subsidies towards green car purchases, the mentality could start changing in that direction. Ito pledged that Honda will continue to offer hybrid vehicles to the Chinese market, and gradually grow its list of available models more and more, if the Chinese government makes good on enacting policies that would make hybrids the more attractive option for Chinese car buyers.